By taking this stand RBI has also clarified that use
of Bitcoins in India must be in compliance with Indian laws.
Otherwise, civil and criminal prosecutions can be initiated against
the users of Bitcoins in India.

The legality
of Bitcoins in India was never guaranteed. However, in
order to jump upon the wagon band of Bitcoins, many Bitcoins
entrepreneurs and stakeholders are openly violating the laws of
India, especially the cyber law of India.

Techno legal experts have been maintaining that it
is legally wrong to assume that dealings in Bitcoins in India if
strictly legal as individuals and companies have to take care of the
cyber
law due diligence and Internet
intermediary rules compliances. For instance, a platform
selling and purchasing or trading in Bitcoins must not only comply
with the provisions of Information Technology Act, 2000 but also with
laws applicable to online trading and income tax.

With the present advisory, the websites and
individuals dealing in Bitcoins in any manner whatsoever must comply
with the techno legal requirements of Indian laws. Otherwise, they
may find themselves in big trouble.